Credit Conditions Survey - 2015 Q1

This quarterly survey of banks and building societies is aimed at improving our understanding of trends and developments in credit conditions.

Published on
08 April 2015

The 2015 Q1 survey was conducted between 13 February and 6 March 2015.

Supply

The availability of secured credit to households was reported to be broadly unchanged in the three months to early March 2015. Lenders expected availability to increase slightly over the following three months.

Lenders reported that the availability of unsecured credit to households increased in 2015 Q1. It was expected to be unchanged in Q2.

According to lenders, the overall availability of credit to the corporate sector was unchanged in Q1, and was expected to remain unchanged in Q2. The availability of credit to large corporates increased in Q1.

Demand

Lenders reported that demand for secured lending for house purchase decreased significantly in 2015 Q1, as it had in 2014 H2. Lenders expected demand to increase over the next three months.

Demand for credit card lending from households was reported to have fallen slightly in Q1, but was expected to be unchanged in Q2. Demand from households for other unsecured lending products, such as personal loans, was reported to have fallen slightly in Q1, but was expected to rise in Q2.

While demand for lending from large corporates increased in Q1, demand from small businesses and medium-sized companies was reported to be unchanged. Demand for lending from small businesses was expected to increase significantly in Q2.

Loan pricing

In 2015 Q1, overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — were reported to have narrowed again. And spreads were expected to narrow significantly further in Q2.

Lenders reported that spreads on other unsecured lending products, such as personal loans, narrowed significantly in Q1 and were expected to narrow significantly further in Q2.

Spreads on lending to small businesses were unchanged in Q1, while spreads for medium-sized companies and large corporates narrowed significantly. In Q2, spreads on lending to each business size were expected to narrow slightly.

Defaults

Lenders reported that default rates on secured loans to households fell significantly in 2015 Q1, and a further fall was anticipated in Q2. Losses given default on secured loans to households also decreased significantly in Q1, but were expected to increase significantly in Q2.

Default rates on credit card lending to households fell in Q1, but losses given default rose. Default rates on other unsecured lending to households rose in Q1 whilst losses given default were unchanged.

Default rates on corporate lending fell in Q1, particularly on lending to large corporates. Losses given default were unchanged in Q1 for small businesses, but fell for medium-sized companies and large corporates.